Nonito Donaire made up for his countryman Manny Pacquiao's loss last week with a spectacular knockout of Jorge Arce at 2:59 of the third round Saturday night at the Toyota Center in Houston, and sent Arce into retirement.

Donaire, who has one of the best knockout punches in the sport, knocked Arce down in the second round, then came back at the end of the third round and caught Arce with a powerful left hook to end the fight right there. Donaire retained his WBO super bantamweight title with the victory.

"I went out there and pretty much timed him," Donaire said. "We knew that he was going to open up. He was a tough guy. He actually got me in the body. I caught him with a good straight right hand and that counter hook came in."

Donaire, 30, known as the "Filipino Flash," saw his friend Manny Pacquiao get dropped by Juan Manuel Marquez, ironically at 2:59 of the sixth round last week in a shocking finish. He said he was thinking about that during his fight with Arce.

"There were a lot of fans that said, you got to get him, this is for the Philippines," Donaire (31-1, 20 KOs) said. "But I love Mexico as well. Mexican fighters are tough and I have the best respect for all of them. I'm hoping (the Filipinos) can be proud of what I've done tonight."

Donaire used his left hook for the knockout despite coming into the fight not fully healed from an injured knuckle on his left hand.

"We were kind of nervous coming into this fight," Donaire said. "I never really hit with the left hook, but I knew from the personality I have that I'm going to go out there no matter what."

Arce (61-7-2, 46 KOs) said after the fight it was to be his last. "My career's over. I'm leaving after the best man," Arce, 33, said. "I have my family to take care of and my children and I promised them that if I lost, I would leave."

Donaire said he would like either Abner Mares or Guillermo Rigondeaux next. "Bring em all on. I've done what I need to do this year, I'd like Mares because he's calling me out. But if that doesn't happen, we always have Rigondeaux."

Both fighters congratulated HBO broadcaster Larry Merchant, who is retiring after this fight after 35 years with the premium network. As Merchant left the ring the crowd chanted "Larry, Larry, Larry!"